Appeals Court: Law Allowing Private Audits of Counties is Constitutional

Otto, Rebecca Otto
Credit: rebeccaotto.com

ST. PAUL, Minn. – The Minnesota Court of Appeals affirmed the right of Minnesota counties to use private auditors for financial reviews on Tuesday, rather than having to go through the office of State Auditor Rebecca Otto.

“As the current steward of this Constitutional Office, I must do what is right, not politically expedient,” Otto wrote in a statement. “And therefore, I will be asking the Minnesota Supreme Court to settle this issue.

In the 2-1 decision, the court ruled that a law enabling counties to pursue contracts for annual audits with private firms was constitutional. The majority decision emphasized that the law merely gives counties the option to conduct their audits through private firms, and that it did not in fact reduce the powers of the State Auditor’s office.

The office still holds the power to set standards for county audits, ensure compliance with those standards, require additional information from private firms that audit counties, make “additional examinations as she determines to be in the public interest,” as well as visit counties to inspect their records without the need to give prior notice.

“Thus,” wrote the majority, “Although the state auditor may be precluded from initially performing required annual audits based on county preference, she retains substantial authority over the conduct of those audits, including the authority to perform auditing functions that she determines to be in the public interest.”

However, Otto was clearly emboldened by the dissent of Minnesota Court of Appeals Chief Judge Edward Cleary, as she cited his dissent in her statement to justify her plan to appeal the case to the Supreme Court.

“There is still dispute over whether the county audit law is constitutional. I have maintained that the county audit law is unconstitutional,” Otto wrote, “In his dissent, Judge Cleary went on to say that if left to stand, this law ultimately will relegate the Office of the State Auditor ‘to a mere shadow of what the framers of the Minnesota Constitution intended.’”

Otto’s suit was directed against Wright and Becker Counties for hiring private firms as the law allowed, as well as against Ramsey County for declining to commit to a multiyear contract with her office for audits.

Rep. Sarah Anderson (R-Plymouth) had some choice words for the lawsuit, as well as Otto’s plans to appeal.

“Auditor Rebecca Otto has already wasted over $250,000 of taxpayer dollars on these politically motivated lawsuits,” Anderson wrote in a statement. “Any further appeal to the Minnesota Supreme Court would serve no purpose other than to waste taxpayer dollars to promote the Auditor’s gubernatorial bid.”

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